Jazz Pharmaceuticals Remains A Buy At Deutsche Bank Post Q2 Report

Deutsche Bank maintained its Buy rating on Jazz Pharmaceuticals plc - Ordinary Shares (NASDAQ: JAZZ) despite the company's second quarter earnings miss.

"While management's mention of a slowdown in the diagnosis of narcolepsy and continued payer hurdles may create some concern that Xyrem growth will slow, we were encouraged by the strong performance of Defitelio, and look forward to the approval and launch of Vyxeos in 2017," analyst Gregg Gilbert wrote in a note.

The analyst noted that the continued growth of Defitelio and Vyxeos will be key going forward, and expects the management to remain active on the business development front.

Gilbert also lowered his Xyrem estimates based on more conservative volume growth in 2017-20 (4 percent versus prior 5-6 percent), while raising Defitelio estimates. These changes reduced his total revenue estimates by about 2-4 percent.

Consequently, Gilbert's 2016 EPS estimate fell to $8.74 (from $9.91) and 2017 EPS view to $10.60 (from $13.15). Excluding stock compensation expense, the analyst's 2016 EPS would be $10.02 (versus the company's target of $9.90 - $10.30).

However, the analyst raised his price target by $3 to $158.

"We acknowledge that our PT does not imply very significant upside, but more upside is possible if JAZZ can create certainty around Xyrem's duration (by settling with first-filer Hikma/Roxane or winning in court) and/or with smart business development," Gilbert added.

At time of writing, shares of Jazz fell 1.17 percent to $138.37.